Fast-food giants drive revenue in China's market
Cultural adaptation and convenience propel growth.
China's fast-food industry is undergoing a transformation as it adapts to changing economic conditions and consumer preferences. Canvas8’s recent report "Inside the Fast-Food Industry Boom in China," highlights how international fast-food giants and local players are capitalising on these shifts, driving the industry's revenue to $176.3 billion in 2023.
According to Therese Reyes, Lead Editor (APAC) at Canvas8, the success of major players like McDonald's, KFC, and Burger King hinges on "brand recognition" and the ability to cater to "people's local preferences." These brands have adapted their menus to include local flavours, such as KFC's congee and McDonald's Szechuan double chicken burger, which offer a blend of the new and familiar.
The industry's growth is also fueled by the convenience factor, as noted by Emil Fazira, Insights Manager for Food in Asia at Euromonitor International. "Fast food players have also been really good in offering the convenience factor," she said, emphasising the importance of quick preparation and multiple fulfilment methods, including mobile ordering and delivery, particularly in the Chinese market.
As Western-style fast food matures in China, brands must innovate to maintain their market position. Fazira pointed out that "comforting traits" such as nostalgia and a sense of community are becoming increasingly important. These traits are achieved through localization, which includes adjusting flavours to meet local tastes and mimicking classic Chinese dishes.
Reyes echoed this sentiment, predicting a continued popularity of Western dishes infused with Chinese elements, like Tastien's Chinese burger made with hand-rolled buns. She also foresees a "sustainability push" in product offerings, driven by a growing interest among young Chinese consumers in healthier, more sustainable lifestyles.
Fazira highlighted the industry's effective use of digital tools, which have facilitated the integration of delivery and online ordering, significantly impacting the food service industry. "Other industries could really learn from how the fast-food industry in China has adapted," she said, noting that digital strategies help brands employ loyalty schemes, innovate, and expand aggressively.
Reyes emphasised three key factors for success in China: affordability, convenience, and culture. While affordability and convenience are crucial, cultural adaptation is equally important. "Brand recognition can only take you so far," she warned, adding that genuine cultural integration is essential.
